MW Bitcoin is suffering from an 'attention' deficit, as momentum traders have moved on
By Frances Yue
'The AI trade is sucking the blood out of crypto,' one analyst says
Bitcoin has fallen about 32% year to date, while the iShares Semiconductor ETF has rallied about 83% over the same stretch.
Bitcoin is still trading like an "attention asset," but not in a good way: Momentum traders have turned their attention elsewhere.
After years of trading like a "high beta" cousin of technology stocks, bitcoin (BTCUSD) has started to lose its grip on investors' speculative imagination. High beta refers to assets that tend to trade in the same direction - but the moves tend to be more extreme, something which momentum traders seek.
Last year, gold (GC00) and other precious metals offered a cleaner expression of the so-called debasement trade, as investors looking for a hedge against fiscal worries, weakness in the dollar DXY and geopolitical risk flocked to hard assets. This year, chip stocks have become the more compelling risk-on bet, powered by artificial-intelligence spending and earnings momentum.
Even some high-profile bitcoin supporters have sounded more skeptical. Billionaire investor Mark Cuban said last month he had sold most of his bitcoin after concluding it had failed to act as a hedge against dollar weakness and geopolitical turmoil.
The result is an awkward kind of decoupling for crypto bulls. Bitcoin remains correlated with the Nasdaq-100 NDX, but its relationship with semiconductor stocks has weakened sharply, suggesting it is no longer moving with the parts of the market investors are most eager to chase.
The dynamic reflects a broader rotation in momentum, according to Jay Hatfield, chief executive at Infrastructure Capital Advisors.
"Right now there are other asset classes with more momentum, and so momentum players would rather be in chip stocks than in bitcoin," Hatfield said in a phone interview. "You do see those rotations. When bitcoin broke down, that was what helped fuel the gold and silver (SI00) trade last year."
Bitcoin dropped Friday to an intraday low $59,666, the lowest price seen since Oct. 10, 2024, before paring losses to be down 5.2% at just above $60,280, according to Dow Jones Market Data. It has dropped 31% in 2026, and has tumbled 52% from its record high of $126,272.76 hit on Oct. 6 of last year.
Meanwhile the iShares Semiconductor ETF SOXX, an exchange-traded fund that tracks major semiconductor stocks, has rallied 79% so far this year, according to FactSet data.
The divergence has become the story. "Crypto is an attention asset - but the AI trade is sucking the blood out of crypto," said Martin Leinweber, head of digital-asset research and strategy at MarketVector Indexes.
Bitcoin's tech-stock link is getting messier
Correlation data show that bitcoin's relationship with large-cap technology shares at large remains elevated, while its relationship with the semiconductor and software sectors has begun to break down.
The chart below shows the 30-day rolling correlation between bitcoin and three tech benchmarks over the past 10 years: the Nasdaq-100, which tracks 100 of the largest nonfinancial companies listed on the Nasdaq COMP; the iShares Semiconductor ETF; and the iShares Expanded Tech-Software Sector ETF IGV, which tracks software stocks.
Bitcoin's 30-day correlation with NDX is still around 0.45, above its 10-year average, according to Dow Jones Market Data. But its correlation with SOXX has fallen to 0.27, from 0.55 at the start of the year, while its correlation with IGV has dropped to 0.27, from 0.38.
In other words, bitcoin is still somewhat connected to tech stocks, but it no longer moves with them in a simple, automatic way, according to Jag Kooner, head of derivatives at crypto exchange Bitfinex.
In the past, investors could often treat bitcoin like a high-beta version of the Nasdaq: When tech stocks rallied, bitcoin tended to rally harder, and when tech sold off, bitcoin often fell harder, Kooner noted.
That relationship has become messier. Bitcoin still responds to broader risk appetite when markets are liquid and investors are willing to take risks, but its day-to-day price moves are increasingly being driven by crypto-specific factors - including ETF flows, concerns related to corporate bitcoin play Strategy (MSTR), and whether there is enough spot-market demand to absorb selling, Kooner said in emailed comments.
The Strategy concern
Those crypto-specific pressures have come into sharper focus after Strategy sold a small amount of bitcoin earlier this week.
The sale was modest, but it unsettled investors because Strategy has long been viewed as one of bitcoin's most important corporate buyers, MarketVector's Leinweber said.
Strategy's liquidity position has become a major overhang for bitcoin, he noted. The company faced about $1.7 billion in annual obligations tied to its preferred-share instruments, which are hybrid securities that sit above common stock and typically require regular dividend payments to investors, according to public filings.
The problem is that Strategy does not have an obvious cash engine to cover that bill: Its traditional software business does not generate enough free cash flow, while its main asset, bitcoin, does not pay interest or dividends, Leinweber said. The financing environment has also become more challenging because Strategy's stock now trades at a discount to the bitcoin it holds, he added.
As a result, even the company's small recent bitcoin sale rattled the market because it raised fears that larger sales may follow, according to Leinweber.
"As long as [the] liquidity situation of Strategy doesn't improve, it's impossible for the crypto market to go up," he said.
Representatives at Strategy didn't immediately respond to an email seeking comment.
-Frances Yue
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(END) Dow Jones Newswires
June 05, 2026 17:58 ET (21:58 GMT)
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